The powerful start-up Uber has filed an application to take the Australian Taxation Office (ATO) to court for unfair targeting, after drivers have been forced to register for GST from August 1, 2015.
Thousands of Uber drivers across the nation had to register for GST from August 1 after the ATO classified employees as taxi drivers.
Uber argues that the GST laws do not cover the ‘sharing economy’ and that they are being unfairly treated whilst truck drivers, bike couriers and Airbnb hosts are exempt from GST.
Uber also argues they are the business partners of everyday Australians. “This is not a tax on Uber, but rather an additional tax on the thousands of everyday Australians who earn a flexible income by sharing rides on the Uber platform” said Uber general manager David Rohrsheim.
Uber’s success to avoid GST from April last year until this month implies the Silicon Valley business has resources. The “Unicorn”, a term for tech startups like Uber that have achieved a valuation of $US1 billion or more, was recently valued at $US51 billion. Uber is supported by powerful investors include Google, China’s Baidu and now Microsoft.
The “sharing economy” is an economic opportunity with car owners utilising their assets to earn revenues whilst customers have access to a cheaper ride. But there is a dark side to it. Traditional jobs like taxi driving are being threatened by Uber. Australian Taxi Industry Association CEO Blair Davies said “We know if they are allowed to continue to operate and have the ability to price their product significantly cheaper than taxis, it means they will win over demand.”
Uber still believes they can offer you the best value for money. According to Uber –rides will still be approximately about 25 to 35 per cent cheaper than comparable taxi trips.
For any queries or questions about tax you can get in touch with the team here at Fortis Accounting Partners on 02 9267 0108, or via info@exemplary-financial.flywheelsites.com.
